The Great Game Grows

Post today at Foreign Exchange about the Great Game:

It’s been widely known for some time that China is engaged in a global race to acquire commodities: oil, gas, minerals, water, you name it. It’s well known that China is after these goods for a combination of reasons: too much cash on hand, a hungry growing economy that needs raw materials, and a keen awareness that controlling commodities—and their futures—is a powerful form of economic influence.  Policy wonks call this The (New) Great Game.

But experts have usually understood the Great Game in regional terms: the loot was concentrated in the Caucusus, Central Asia and the Middle East, and the major players were supposed to be China and Russia. That picture has always struck me as off base…

I go on to argue that the Great Game is increasingly global and  more diverse in the commodities it involves and to suggest how that changes U.S. policy imperatives. Go read.

Chat with Andris Piebalgs

My post at Foreign Exchange today is an interview with Andris Piebalgs, the European Commissioner for Development. An excerpt:

“Some of your member states have expressed support for a financial transactions tax as a source of funding. What is the Commission’s view of that?

It’s very clear that official aid will need money beyond .7, and then on top of that aid we will need to raise funds for a climate change pledge. We need to start thinking as though at the end of the day somebody will count the money and if you haven’t delivered, you will be responsible for the misery in the world.

Yes, the tax is logical. Why? We tax everything else. All activities are suffering from taxation. Technically, though, it should be difficult to administer. It needs global governance, and in that, it is a test case for the G20. If they can’t do this, it is on them to propose an alternative. We could tax air tickets, say. Much simpler, but much less popular.”

I really enjoyed the whole chat, and encourage you to go read it.

Good News from the WTO

New post over at Foreign Exchange on the WTO’s new trade stats and WTO chief Pascal Lamy’s discussion with the press. Some highlights:

“contrary to the original 9.5% stat released by the agency, international trade is going to be up 13.5% this year. That’s quite a change from the 15 point plunge global trade took last year. In fact, it’s a new record for annual trade expansion.”

“You may recall that it was not so long ago that Lamy’s agency was getting pilloried by liberal reporters and harassed by protesters on the ground that its free-trade agenda is a form of economic imperialism that lets the rich countries benefit at the expense of the poor. That critique has always been flawed, but in case the critics need more evidence, here’s the relevant stat: this year’s 13.5% increase is comprised of an 11 point expansion in the developed world and a 17 point expansion in the developing world. When trade grows, it grows MUCH faster for the poor. Moreover, Lamy notes, “a large part of this growth is south-south trade.” Rich countries can’t be ripping off the poor if it’s the poor countries who are trading with one another.”

There’s much more info, so go read the whole thing.

China’s Pearl

My latest story is up, on Chinese investment in Balochistan, a Pakistani province that borders Afghanistan, Iran and the Persian Gulf. As others have reported, China is building up investments in Central and South Asia in a strategy it calls the “string of pearls,” in a way that contains/constrains India. My piece looks at how China goes about staking its claim and what the strategy, as applied in Pakistan, means for the United States.

A Spoonful of Sugar

I’ve got a piece in this week’s edition of Forbes on the real crisis in Pakistan—the systemic failures of government, particularly on economic issues. My case study is the mismanagement of the nation’s sugar supply:

The sugar crisis has its roots in the fragmentation of Pakistan’s sugar sector. Growers, millers, wholesale distributors and retailers each have their own regulatory overlords offering protectionist perks and their own cartels to defend such gains. Though this structure goes back to the 1950s, recent policy decisions and the worldwide spike in prices of commodities like sugar have aggravated its effects.

…Economic problems provide rallying cries for opponents like Sharif and radical insurgents eager to bring down the government, while a weak and dysfunctional state contributes to economic distress. In the case of sugar, whose consumption in Pakistan is approaching developed-country levels, the danger is acute: In 1969 a sugar shortage helped bring down the rule of military dictator Ayub Khan.

Read the piece in full (and comment!) here.

A Subcontinental Water-Fight

I’ve got a short item in this week’s Newsweek on control of Afghan water:
What alarms Pakistan most is the possibility that India will gain control over the water from two Afghan rivers that flow into the volatile Pakistan border regions, where water shortages could inflame local insurgencies. Indian investment in Afghanistan has doubled since 2006, to $1.2 billion, and up to 35 percent of that is going into canals for local irrigation, as well as hydroelectric dams that will supply power to Iran and Turkmenistan, India’s gateways to Central Asia and the Gulf.

Read and comment here and see the write-up on my project at the Columbia J-school website.